On December 31, 2020, for GAAP purposes, Clubs Inc. reported a balance of \(\$ 40,000\) in a warranty liability for anticipated costs to satisfy future warranty claims. No claims were paid in 2020. Pretax GAAP income is \(\$ 300,000\) and the tax rate is \(25 \%\). Assume no other differences between the tax bases and GAAP bases of assets and liabilities, or any beginning balances in deferred tax accounts.

Required

a. Record the income tax journal entry on December 31, 2020.

b. Assume that there was a December 31,2019 , balance of \(\$ 4,000\) in the deferred tax asset account. How would your answer to part \(a\) change?